AGOA benefits pulled for South Africa

Beginning Jan. 1, South Africa will lose its privileges to ship products to US at zero-tariff rate.

November 6, 2015

4 Min Read
AGOA benefits pulled for South Africa

The Obama administration announced that beginning Jan. 1 South Africa will lose its privilege to ship to the United States agricultural products through the African Growth and Opportunity Act (AGOA) at a zero-tariff rate, a move hailed by pork and chicken producers.

The National Pork Producers Council and National Chicken Council have been urging the administration to withdraw or limit trade benefits for South Africa because of that country’s reluctance to provide market access to U.S. pork. (It also restricts imports of U.S. beef and chicken.)

According to a U.S. Trade Representative press release, the President determined that South Africa is not making continual progress towards eliminating barriers to U.S. trade and investment.  The President said he intends to take action 60 days after the notification to suspend benefits to the agricultural sector, unless South Africa meets certain benchmarks to eliminate barriers to U.S. poultry, pork and beef.  This determination is the product of an "out-of-cycle" review of South Africa that was mandated by Congress in Trade Preferences Extension Act of 2015.

“South Africa has been willing to use U.S. preferential trade programs but is unwilling to extend even customary equitable treatment to imports of pork from the United States,” said NPPC president Dr. Ron Prestage, a veterinarian and hog farmer from Camden. S.C. “The U.S. is the top global exporter of pork, shipping it to more than 100 nations every year. But because of non-science-based restrictions that don’t pass the red face test, we can’t ship pork to South Africa.”

South Africa gets duty-free access to the U.S. market for dozens of its products under AGOA and the Generalized System of Preferences (GSP). In 2014, it shipped $1.7 billion of goods to the United States under AGOA and $1.3 billion under the GSP program. The administration’s action is focused on the AGOA program.

Despite the tariff-free treatment of its products shipped to the United States, South Africa enforces import restrictions on U.S. pork to prevent diseases for which there are negligible risks of transmission from U.S. pork products. The South African Ministry of Agriculture restricts pork because of Porcine Reproductive and Respiratory Syndrome (PRRS), for example, even though there is no documented scientific case of PRRS being transmitted to domestic livestock through imported pork. Prestage noted that New Zealand, a PRRS-free nation, imported pork for 10 years from PRRS-positive countries without getting the disease.

“Pork producers have run out of patience, and it’s time to draw the line,” Prestage said. “We are tired of watching South Africa accept pork from our key global competitors in Brazil, Canada and the EU while rejecting U.S. pork. We applaud the administration and members of Congress for standing up for U.S. pork producers and American agriculture by recognizing that South Africa is not playing fair and withdrawing its AGOA trade benefits.”

The President's announcement comes after the completion of an out-of-cycle review of South Africa's AGOA eligibility. Sens. Johnny Isakson (R., Ga.) and Chris Coons (D., Del.) secured language in this year's AGOA reauthorization requiring this review after pressuring the South African government for nearly a year to end the anti-dumping duties on U.S. poultry. The bipartisan amendment was introduced by Isakson and co-sponsored by Carper and Sen. Mark Warner (D., Va.)

"This should send a clear message to South Africa and their poultry industry that they will not be given a 'Get out of jail free' card every time AGOA rounds the turn to pass 'Go.'  It makes no sense for the United States to give special preferences to countries that treat our trade unfairly," said NCC president Mike Brown.

Sens. Isakson, Coons, Tom Carper (D., Del.) and David Perdue (R., Ga.) issued a statement after Obama's announcement saying, "It is unfortunate that this action must be taken, but South Africa has repeatedly failed to implement the deal reached this summer and missed a key deadline last month to finalize the trade protocol and health certificate for U.S. poultry. South Africa does not deserve to receive benefits under AGOA as long as they refuse to drop unfair trade policies that have effectively slammed the door on American chicken imports for over a decade. There is still time to address these issues, and we hope the President's action spurs South Africa to open their market to American poultry immediately."

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